Abstract

Due to the success of the 'Go Global' policy, in recent years there has been a dramatic increase in overseas direct investment made by Chinese state-owned enterprises (SOEs). However, Chinese SOEs' overseas investment has been viewed with suspicion and several attempted acquisitions discontinued in the face of strong opposition from host countries. This article analyses the plausibility of some common fears about Chinese SOEs' overseas direct investment and evaluates critically the regulatory responses of the US, Canada, Australia and the European Union motivated by such fears. The article argues that though some fears are legitimate, they are grossly exaggerated in view of the SOE reforms in China over the past three decades. The policy implications of this finding for both host countries and China's ongoing SOE reforms are also explored.